Gamuda- dropped to strong support

Gamuda took a dive this morning. It hit an intra-day low of RM4.10. In August, Gamuda also had a sharp dive in August to an intra-day low of RM4.12. This level at RM4.10-4.20 is a support level. If it is not violated, the stock should rebound from here.


Chart 1: Gamuda's daily chart as at Jan 15, 2014 (Source: Tradesignum)

From the weekly chart, we can see that Gamuda is in a long-term uptrend line with support at RM4.00.


Chart 2: Gamuda's weekly chart as at Jan 15, 2014 (Source: Tradesignum)

From my observation, Gamuda is a leading barometer of our market. If Gamuda recovers after a long sell-off, then the market is ready for recovery. But, if Gamuda falters, you can expect the market to follow suit. Let's see how well Gamuda can stay above the RM4.10-4.20 market. If not, let's hope it can stay above the long-term uptrend line at RM4.00.

I have been posting sporadically because I am cautious about the market outlook. The various measures announced by the government to curb property speculation; to withdraw various subsidies; plus the implementation of GST in 2015 have significant impact consumer sentiment. Once the sentiment is affected, consumer spending would decline and stock market would follow suit. I think the market is at an inflection point and could correct for the next few weeks. FBMKLCI may test the 1800 psychological support. The next support would be at 1760-1770. Let's hope we can stay above the 1800 mark.


Chart 3: FBMKLCI's daily chart as at Jan 15, 2014 (Source: Tradesignum)

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Gamuda.